ESID Working Paper No.56

The role and responsibility of foreign aid in recipient political settlements

Pablo Yanguas

April, 2016

1 Effective States and Inclusive Development Research Centre, The University of Manchester

Email correspondence: pablo.yanguas@manchester.ac.uk

ISBN: 978-1-908749-57-4 Abstract Political settlements analysis has highlighted the role of powerful political and economic actors in shaping institutional outcomes across countries. Its focus on national elites, however, risks biasing this type of theorising towards local factors, when in fact many policy domains in developing countries have become transnationalised: much like private finance or transnational activism, foreign aid can play a significant role in shaping political settlements, for instance those underlying public finance management or basic service delivery. This paper has four aims. First, it revises the basic concept of political settlement with a combination of field theory and contentious politics that emphasises contestation between incumbents and challengers and the mechanisms through which they are affected by transnational forces. Second, based on this conceptual framework, it outlines six ideal types of aid influence over a developing-country political settlement, illustrating donor tendencies to support continuity or change. Third, it investigates the ethical implications of donor influence over political settlements, identifying the types of intervention favoured by consequentialist and non-consequentialist calculations. Finally, the paper presents the kernel for a practical ethic of assistance, which asks whether current debates in the aid community have fully come to terms with the responsibility that derives from agency in the contentious politics of inclusive development.

Keywords: political settlements, foreign aid, ethics

Yanguas, P. (2016) The role and responsibility of foreign aid in recipient political settlements. ESID Working Paper No. 56. Manchester, UK: The University of Manchester. Available at www.effective-states.org

This document is an output from a project funded by UK Aid from the UK government for the benefit of developing countries. However, the views expressed and information contained in it are not necessarily those of, or endorsed by, the UK government, which can accept no responsibility for such views or information or for any reliance placed on them. How do aid donors interact with the political settlements of the countries in which they operate? Do they have any kind of moral obligation to act in certain ways but not others? If so, what logic of assistance should guide their choice of behaviour? This paper aims to establish a basic conceptual framework for answering these questions. It is inspired by the strange irony that political settlements theory has been financially promoted by donors – in particular the United Kingdom Department for International Development (DFID) – and yet the researchers who work on refining and testing the theory tend to use it as a national-level analytical tool which does not adequately address the influence of such transnational forces as aid donors themselves. This is not a new critique of political settlements (Hickey, 2013b), but in this paper I hope to contribute the seeds of a new analytical map for developing some preliminary responses to the original sin of donor-funded political settlements research. In addition, I question whether the conventional practical implications drawn from this kind of work withstand ethical scrutiny. This is not to say that the proponents and users of the theory are morally suspect; only that a bit more attention may need to be paid to the ethics of assistance which arise from settlements research.

The structure of the paper highlights four interrelated tasks, moving from the purely conceptual to the eminently practical. In the first section, I introduce a sociological interpretation of political settlement based on field theory and contentious politics that places agency, multi-level interaction and contestation at the centre of analysis. In the second section I build on this conceptual effort by developing an explanatory typology of six ideal types of aid influence over a political settlement, according to whether they support incumbents or challengers, and what mechanism of interaction they are based on. In the third section I explore the ethical implications of aid’s and donors’ influence over a political settlement, and the significantly different implications of adopting a consequentialist (e.g. utilitarian) ethical logic as opposed to a non-consequentialist (e.g. value-based) logic of assistance. Finally, in the fourth section I sketch out what a practical ethics of assistance would ask of five ongoing agendas within the development community: aid effectiveness; the results agenda; good enough governance; political-economy analysis; and applied political settlements research.

1. Political settlements as strategic action fields

The political settlements approach is a relative newcomer to academic thinking about development. It emerged from the so-called “grey literature” – and to some extent it has stayed mainly there – and thus far it does not seem to have entered “normal social science” in a Kuhnian sense. Therefore the obligatory first task in exploring how foreign aid and donors interact with political settlements is to establish a basic conceptual framework.

The concept of political settlement is commonly used in one of two potential definitions. The first one – linked to its origins in conflict resolution and stabilisation debates – emphasises the settlement as an underlying “social order” (as used by North, Wallis and Weingast, 2009) which allows a society to solve the “problem of violence” through politics (Khan, 2010), using established processes to peacefully – but not necessarily agreeably – solve “disagreements about interests, ideas and the distribution and use of power” (Laws and Leftwich, 2014). In this conception, the political settlement is explicitly contrasted with the unsettled politics of violent contestation that prevail in fragile and conflict-afflicted states. The second definition of political settlements (which is often enmeshed with the first one) has to do with their role supporting specific institutional configurations. This “deeper level”, according to Khan (2010), is both expression and reproduction of the relative power of different classes and groups, a “balance” on which the politics of every state rest (di John and Putzel, 2009). In this second conception – the one prevalent among practitioners and scholars of development in the UK – the political settlement is a political-economy explanation for the configuration of formal and informal institutions in a country.

Beyond this broad-brush understanding of power relations underlying institutions, the emerging literature on political settlements is somewhat inconsistent, with little clarity about what actors are relevant for the settlement, how their interests are formed, what their patterns of interaction look like, or how they interact with lower and higher levels of analysis. In terms of actors, initial formulations framed the political settlement broadly in terms of state-society relations (Fritz and Rocha Menocal, 2007), in the vein of the earlier work by scholars like Joel Migdal (Migdal, 1988). A parallel use of the term focused instead on contending “social groups” and “classes”, with the state being an expression of their relative power (Khan, 2010); this understanding seems much closer to earlier neo-Marxist and pluralist understandings of the state as an instrument or arena of contestation for powerful groups within society (Evans, Rueschemeyer and Skocpol, 1985). More recently, writing on political settlements seems to have reached a consensus of sorts on the role of “elites” as the central bargaining actors (DFID, 2010; di John and Putzel, 2009; Hickey, 2013b; Laws, 2012; Whaites, 2008). None of these authors, however, actually define the conceptual boundaries for the term elite, which can denote social groups, landed and non-landed economic elites, classes, gender groups, and even “those who occupy the state and society more widely” (di John and Putzel, 2009). Lastly, the origins of these actors’ intentions are often underspecified: in some cases, political settlements result from “self-interest” or “a strong sense of a shared ethos” (Whaites, 2008);

Even without a clear definition of actors, political settlements theory could have significant value if it provided a novel understanding of how settlements actually emerge. Variously, the relevant reports and working papers refer to “shared understanding” (Whaites, 2008), “balance of power” (di John and Putzel, 2009; Khan, 2010), “bargaining” (di John and Putzel, 2009), “negotiated agreement” (Fritz and Rocha Menocal, 2007), or “two-level game” (Laws, 2012). While all these terms hint at informal decision-making processes which occur underneath or around formal institutions, none of them are actually developed into explicit models. For that reason it is impossible to infer whether a political settlements approach assumes perfect or imperfect information, rationality or bounded rationality, simultaneous or sequential choice points, one-off or iterative interactions. We know that lower-level actors – “constituencies”, “followers”, “society” – matter (Fritz and Rocha Menocal, 2007; Laws, 2012; Whaites, 2008), but there is no specification of whether this relationship is a parallel kind of bargain, some sort of principal-agent relationship, or a mere aggregation of interests. We are also told that political settlements are better understood as “ongoing processes”, even when they contain “one-off events” (Laws, 2012), but there is no way to actually know how the former leads to the latter or vice versa.

For the purposes of this paper, and bearing in mind existing critiques, I will define a political settlement as a strategic action field in which the interaction of national elite actors determines how resource endowments and ideas shape institutional and policy choices. This definition is loaded with enough conceptual baggage that it is worth unpacking step by step.

Strategic action fields are “the fundamental units of collective action in society” (Fligstein and McAdam, 2012). Fields are demarcated domains of social interaction in which participants strategically engage each other to reproduce and contest rules, resources and hierarchies. They are a “meso level” category, as opposed to the micro level of individuals and the macro level of whole societies, but there is great flexibility as to what size a field can be: as small as a single unit within an organisation, or as large as a state or a market for specific services. Furthermore, fields can be nested within and overlap with each other, creating a patchwork of strategic social interactions. A political settlement can be thus understood as a national-level field defined by a series of horizontal and vertical relationships (Khan, 2010). At a very macro level, the national political settlement is interdependent with markets, the state and society. The political settlement may dominate other fields which rely on elite validation for their continued operation, such as the various policy domains regulated or affected by the state. At that lower level, these policy domains comprise the decision-makers, implementers, providers, clients and general stakeholders involved in policy-making. From this perspective, field theory allows us to connect political settlements with more conventional theories about state-society relations (Migdal, 1988) or the embeddedness of public policy (Evans, 1995).

Strategic action fields, like political settlements, are not merely structural features: they are imbued with agency and contestation. Fligstein and McAdam focus on the ideal-typical distinction between field incumbents and field challengers (Fligstein and McAdam, 2012). Field contestation arises when challengers seek to build new coalitions that can overturn the status quo. This is consistent with political settlements approaches, where elite factions vie with each other to produce and sustain a balance of power: we could think of included elite factions as incumbents, and excluded elites and non-elites as potential challengers. This would have the added benefit of bringing political settlements closer to other equilibrium theories like the selectorate (Mesquita, Smith, Siverson and Morrow, 2005). But the ideal-typical split between incumbent and challengers also creates analytical room to populate those boxes with a variety of relevant actors: regime factions; technocrats; interest groups; citizen advocates; corporations; or international actors. Every policy domain will be its own field, characterised by interactions between its own variety of actors. What matters for the purposes of conceptualisation is whether these actors belong in the incumbent coalition or whether they are challengers.

As strategic action fields, both a political settlement and any specific policy domain entail a modicum of social contestation. Taking a cue from theories of contentious politics (Tilly and Tarrow, 2006), we can stipulate a constant tug of war between opposed processes of mobilisation and demobilisation: challengers arise and organise to reform or overcome incumbents, while these use their institutional and discursive position to maintain the status quo. These processes unfold through dynamics of emergence, reproduction and crisis shaped by specific social mechanisms (Elster, 2007; Hedström and Swedberg, 1998). There are three mechanisms that seem particularly relevant to the analysis of aid and political settlements: the “diffusion” of new cognitive and normative ideas to a specific policy field; the “brokerage” of new links between previously unconnected fields; and the “certification” of certain field actors by incumbents in interdependent or dominant fields. These mechanisms are ubiquitous in studies of mobilisation (Tarrow, 2011; Tilly and Tarrow, 2006), and they are crucial for our understanding of the dynamics of field interaction.

Crucially, both political-settlement and policy-domain fields interact with other national and transnational fields. The idea of interdependence entered international relations theory more than four decades ago (Keohane and Jr, 1977), and has since been explored by scholarship on international and global political economy (Farrell and Newman, 2014; Frieden and Rogowski, 1996; Lake, 2009; Milner, 1997). A 21st century observer would be hard-pressed to find a single country case where transnational forces do not play a significant role in policy and institutional processes: transnational advocacy networks (Keck and Sikkink, 1998), international financial institutions (Dreher, 2009), and – particularly in developing countries – aid donors can have a powerful influence over the political settlement (Yanguas, 2012, 2014). I consider a policy domain to be “transnationalised” when external actors or neighbouring transnational fields have a significant enough influence over the dynamics governing policy and institutional choice.

2. Types of aid influence in political settlements

While the political settlements approach was first used in the field of post-conflict stabilisation and peace-building, it has since become a fixture of development studies in the UK and elsewhere. Often animated by DFID funding, individual researchers as well as dedicated research centres are exploring how the underlying political settlement of a developing country affects such varied outcomes as industrial policy (Whitfield and Buur, 2014), education provision (Abdulai and Hickey, 2014), natural resources (Bebbington, 2013), or gender policy (Nazneen and Mahmud, 2012). These studies tend to operate under the assumption that understanding the inner workings of a country’s political settlement is essential for development, and thus for any actor with a developmental agenda. And that includes aid donors. Aid is a major – albeit declining – transnational influence in many developing countries, usually strongest in those with the weakest formal institutions and an inability to secure financial resources through taxation or access to international financial markets. The rise of non-traditional donors and South-South cooperation has made a clear dent on a traditional aid system dominated by Western donor agencies and multilateral development organisations (Kragelund, 2012). However, for many countries in Africa, South Asia or Central America, aid as a reality is going nowhere. So how would a field-theory framework interpret aid as a transnational influence on political settlements?

We can examine different types of influence as defined by the intersection of two of the basic ingredients of field theory outlined above: actors and mechanisms. First, foreign aid can target primarily the incumbent or challengers within a political settlement and policy domain. Second, the mechanism through which that influence is exerted varies according to the degrees of intervention: a more or less passive diffusion of ideas, the external certification of field actors, and the active brokerage of new relationships. The intersection of these two dimensions creates a sixfold explanatory typology (Elman, 2005) for understanding the impact of aid on recipient political settlements (see Table 1). Based on it, we can begin to hypothesise whether certain forms of aid are more likely to support continuity or change in the existing political settlement, strengthening the opposing processes of demobilisation and mobilisation.

Table 1. Types of aid influence in political settlements

| Incumbent | Challenger | |-----------------|------------------| | **Diffusion** | Adaptation | | **Certification**| Legitimation | | **Brokerage** | Consolidation |

**Diffusion: adaptation vs contestation**

The flow of ideas across borders and policy domains is perhaps one of the defining features of development in the 21st century. Sometimes these are ideas about how the world works, about cause and effect, whereas other times they are ideas about how the world ought to work, about morality and desirability (Schmidt, 2008). Cognitive and normative templates about development cross national borders at an astonishing speed, whether they relate to social protection (Barrientos and Villa, 2015; Weyland, 2005), Keynesianism (Hall, 1989), or post-conflict reconstruction (Englebert and Tull, 2008). From a field-theory perspective, ideas are a crucial element of coordinated action, organising coalitions around shared goals and identities (Fligstein and McAdam, 2012). Ideas are not mere expressions of material concerns, nor a less tangible form of culture, but a contested and malleable tool for field entrepreneurs to strategically deploy in order to shape policy and institutional The role and responsibility of foreign aid in recipient political settlements

outcomes (Blyth, 2002; Zahariadis, 2007). The aid industry is suffused with competing policy ideas about ownership (Sjöstedt, 2013), conditionality (Nelson, 1996), performance contracts (Adam and Gunning, 2002), adaptation and experimentation (Andrews, 2013; Rondinelli, 1993), or the role of politics in development (Carothers and de Gramont, 2013; Yanguas and Hulme, 2015).

When transnational ideas diffuse to recipient political settlements through a specific policy field, they can either buttress the dominant position of incumbents, or bolster the ideational toolkit of challengers. We can call the first instance Adaptation, as new technical and normative ideas enter a political settlement and make it more compliant with international demands, or more resilient to domestic ones – either way, Adaptation ensures that incumbents will be more likely to withstand challengers. Consider, for instance, the diffusion of a new model of national planning centred on the presidential delivery unit, as fostered by Tony Blair’s Africa Governance Initiative (AGI) throughout Africa (Yanguas and Bukenya, 2016). While the ostensible and self-reported goal of AGI’s support to executive planning and oversight is to streamline the governance of development, its immediate effect is to diffuse to political leaders the latest tactics for manufacturing consensus, and to signal to voting publics that top-down approaches to public policy are the most effective ones. Delivery units in recipient political settlements are not likely to create new checks for overbearing presidents, but may very well help them to adapt to a more complex world.

Now consider, in contrast, the participatory principles embodied in the Poverty Reduction Strategy Paper model espoused by the World Bank and IMF in the early 2000s (Hickey, 2013a). By requiring national leaders to hold consultations with governments and civil societies, donors were fostering the rise of alternative voices in development. At best, the “iron triangle” of donors, civil society and state (Gould, 2005) could strengthen accountability in service provision by bringing providers and clients closer together (World Bank, 2004); at a minimum, it forces elite actors to engage with non-elites. Whether PRSPs were intended to be political or not, they had profoundly political repercussions: by using the material incentive of debt forgiveness and the ideational one of discourses about participation, transnational actors sought to empower those who would challenge the dominant political settlement. Even if the PRSP experiment as a whole probably failed in its participatory aspirations (Hickey, 2013a), it represents a perfect example of diffusion as Contestation.

Certification: legitimation vs delegitimation

International validation is often the primary goal of new regimes and weakened state authorities. Even in places where the state barely exists, juridical statehood still carries a powerful symbolic weight (Englebert, 2009; Jackson, 1990). A similar phenomenon applies to international development: just as sanctions signal to a people and to the broader international community the pariah status of a political regime, development assistance signals recognition of existing power distributions and their probable continuation into the future. Certification is the social mechanism common to these two phenomena, one that is often overlooked in development circles outside of the more critical corners.

*Legitimation* represents positive certification. It is by now a stylised fact that Western donors tend to prioritise recipients with whom they enjoy particular geopolitical ties (Alesina and Dollar, 2000; Drury, Olson and Van Belle, 2005; Dunning, 2004). Given its fungible nature, foreign aid serves as an enabler of elite priorities, both developmental and anti-developmental; in clientelistic settings, it very clearly supports dominant patron-client networks to the detriment of potential challengers (van de Walle, 2001). Moreover, it signals to citizens a form of international backing. Budget support is perhaps the most obvious form of implicit political support for dominant elites, even if in practice it has been used by donors as leverage for policy influence (Swedlund, 2013). When certification targets incumbent actors, it leads to *Legitimation* of the existing political settlement. This is particularly so when failure to achieve stated goals rarely leads to full-blown withdrawal of aid; it is more likely to result instead in “ritual dances of reform”, whereby governments promise to deliver and donors promise to hold them accountable (Callaghy and Ravenhill, 1993).

As long as the resources are not directed towards the most powerful elites, we can consider almost any kind of support a form of *Delegitimation*. Most obviously, donors can support civil society organisations or private sector groups (Banks, Hulme and Edwards, 2015), but also the technocratic development and insulation of state bureaucracies which are prone to political capture by ruling elites (Grindle, 1997). It is important to note here that even unintended *Delegitimation* is clearly perceived by incumbent actors, which is why they recurrently complain about donor interference and why some critics accuse NGOs of serving foreign interests (Hearn, 2007). But donors can also be more overt and abrupt in their *Delegitimation*, for instance withholding aid to recipient governments who do not comply with developmental or diplomatic expectations (Hayman, 2011): that was the case with anti-corruption in Sierra Leone in 2007; or in Rwanda in 2012 after claims surfaced that the government had supported the M23 rebellion in the Democratic Republic of Congo.

**Brokerage: consolidation vs disruption**

Brokerage entails a more direct kind of influence in a recipient political settlement, establishing new links between distant actors or policy fields or even coordinating the formation of new coalitions. Diffusion and certification target specific actors, respectively shaping their preferences and expectations or their legitimacy. Brokerage, in contrast, affects the very dynamics of interaction at the core of a political settlement: through it a donor uses its own resources, legitimacy and ostensibly neutral position to facilitate bargaining or trust-building among actors. This is particularly feasible in policy domains subject to collective action or coordination problems, where donors can serve as external information providers and even as third-party arbiters between competing elites. The question here is whether brokerage works towards optimising the incumbent coalition or instead works towards facilitating the rise of challengers. Consolidation represents all forms of brokerage influence that ultimately strengthen the incumbent coalition, whether by strengthening its internal coordination or by anchoring it with alliances crisscrossing neighbouring policy fields. It is crucial to notice how prevalent Consolidation is in development cooperation, even when it is far from the intended goal of intervention. In the field of natural resources, for instance, donor technical assistance and intermediation for the negotiation of exploration and exploitation contracts can strengthen the links between ruling elites and powerful market actors, thereby strengthening the political settlement (Hickey, Bukenya, Izama and Kizito, 2015). In social protection, for instance, supports for efforts to create political space for social protection – such as DFID’s Expanding Social Protection programme in Uganda – can actually generate an additional layer of patronage politics binding ruling party elites, local representatives and sympathetic technocrats ever closer together. But Consolidation can also strengthen more competitive and inclusive political settlements, for instance, when international donors offer electoral support or mediate between competing voices after contested elections.

Disruption, in contrast, entails brokering new relationships outside the incumbent coalition or in direct challenge to it. The STAR-Ghana programme (www.star-ghana.org), for instance, is a donor trust fund which channels money to civil society and professional organisations with the purpose of building their own analytical and agenda-setting capacity. Similarly, in Uganda, the Democratic Governance Facility (www.dgf.ug) channels aid from bilateral European donors and the EU towards state and non-state actors, with the explicit purpose of strengthening voice, accountability, democratic values and access to justice. Both programmes are emblematic of the rise of social accountability in international assistance (Fox, 2015), which at least in principle represents a direct challenge to incumbent actors in most recipient political settlements. Interestingly, Disruption differs from Delegitimation in that donors never actually criticise the recipient government in an outspoken or adversarial fashion: all they do is use the discursive cover provided by formal commitments to elections and accountability to effectively undermine the dominant distribution of power.

3. Uncertainty and the ethics of donor influence

Whatever the type of influence, there is an inescapable implication of political settlements understood as incumbent/challenger fields: the moment transnational forces – such as aid donors – enter play, they will inevitably affect the underlying balance of power, through their effect on resources, participating actors, or dynamics of interaction. In a slight flight of fancy, we could call this the “Aid Interference Principle”: a donor cannot enter a political settlement without altering it. But if the Principle holds true, what does it mean for the ethics of foreign aid? Donor presence clearly entails impact of one kind or another: does impact entail moral responsibility?

Let us begin with an obvious complication: not all mechanisms of influence are equally costly or cost-effective for all donors. It is beyond this paper to determine which kinds of aid donors are more or less inclined to support meaningful institutional change in a challenging environment (Yanguas, 2014). Much will depend on a donor’s particular commitment to ensuring delivery of results despite costs, as well as its appetite for working with or against the existing distribution of power. In essence, these are risk management questions; whether their calculations are straightforward or not is itself an ethical problem.

The question of moral responsibility in foreign aid and poverty reduction is often approached through the lens of the “duty of assistance”: whether the existence of wealthy and poor individuals and states implies an obligation of the former to aid the latter, despite their distant location or the fact that they may be total strangers (Chatterjee, 2004). Despite its many contributions and interesting debates, the ethics of assistance as a field is far too abstract for the question of moral responsibility of aid in political settlements. Those scholars usually address “why” questions – why assist the distant needy – whereas the real question emerging from this paper is “how” – once donors are already supplying aid to a given developing country, how should they design their interventions. As opposed to the first-principle ethics outlined by John Rawls or Peter Singer, what we need is a framework for analysing specific decisions on the basis of concrete moral scenarios: an applied ethics of assistance.

Political settlement approaches – like much of the political economy of development – highlight the political underpinnings of policy and institutional choices. Understood as a critique of the good governance agenda, political settlements theory reveals that the underlying distribution of power will be compatible with some sorts of policy reform but not others; hence the logical implication for reformers to seek changes that are politically feasible instead of the overall reform of the political settlement itself. The discourse on “good enough governance” (Grindle, 2004, 2007), “square peg reforms in round hole governments” (Andrews, 2012, 2013), and “good fit, not best practice” all seem to support what Brian Levy calls “working with the grain” (Levy, 2014). However, there is another equally logical implication for reformers: if the political settlement does not support developmental outcomes, then reformers should not work within it, but find ways of working towards changing it. Whether one goes for the former or the latter depends very much on what kind of ethics guides the choice. In this paper I focus on two widely recognised ethical approaches that very often seep into aid discourse: consequentialism and non-consequentialism.

Risk, good fit and the teleology of aid

Consequentialist ethics – also known as teleology – evaluates the moral rightness or wrongness of actions by their consequences: that is, an act which produces a good outcome is considered to be morally right, while an act which produces a bad outcome is considered to be morally wrong (Peterson, 2013; Scheffler, 1988). Utilitarianism, the doctrine that one should seek the greater good, is a form of consequentialism: for thinkers like Jeremy Bentham and John Stuart Mill, what really matters is the aggregation of happiness, understood as a maximisation of pleasure and a minimisation of pain. For applied ethics, a consequentialist adviser would argue that harm is permissible as long as it contributes to the greater good; in its folk version, “the end justifies the means”. For the ethics of assistance, Peter Singer exemplifies the consequentialist approach when he argues that those who are better off can endure a small sacrifice if it brings about a significant improvement in the welfare for another person who is not (Singer, 1972).

Consequentialist practice is all about calculation: expected utility, costs, benefits, aggregation mechanisms, and so on – maximising the expected results while minimising expected risks. Much of the current development management agenda, populated by operational risk assessment frameworks and theories of change, engages in this type of consequentialist calculation. That includes approaches seeking to “work with the grain”, which have largely addressed a concern in the aid industry that some projects (especially governance ones) tend to be inefficient or simply ineffective. “Best fit” is about aid success from a very consequentialist standpoint, following a clear set of propositions:

- Aid is costly;
- Pro-poor and governance reforms tend to be politically risky;
- Effectiveness is understood as short- to medium-term programme results;
- Aid needs to be designed so as to maximise results in a cost-effective manner by managing political risks.

This teleological approach to aid can only have one logical implication when matched with political settlements theory: design programmes in order to maximise results, given the operating environment as shaped by the existing political settlement.

Consider the following hypothetical case: a developing country with a dominant-faction political settlement, and a single aid donor committed to poverty reduction but animated by consequentialist logic. What forms of influence over the political settlement should such a donor follow? First, let us assume that the cost of intervention in terms of programme risks increases significantly as one moves from influence over incumbents to challengers. Second, let us assume that the cost in terms of political risk also increases as one moves from diffusion to certification to brokerage. Disruption is clearly the most costly and uncertain option, as aid would only have an indirect effect on policy-making at best, assuming that donor influence is significant enough to actually sway elite actors towards a different political settlement. A similar case could be made for Delegitimation and Contestation: with a settlement firmly rooted in a dominant-faction equilibrium, the strengthening of a pro-poor coalition is unlikely to have an impact unless such an actor becomes so important that it effectively enters the incumbent coalition. All three options seeking to change the underlying political settlement would entail significant investment with high political risks and only indirect control over ultimate policy results.

A consequentialist donor would be better served by trying to sway elite preferences, so as to generate marginal improvements in policy results. Both Adaptation and Consolidation would seem equally legitimate options, the choice depending on a calculation of returns to investment: if the dynamic of the settlement is such that the outcome can shift with only minor alterations to the expected utility of a few actors, then Adaptation is the most cost-effective option; if it is the dynamics themselves that hamper pro-poor policy no matter how much actor preferences change – as in a really bad collective action problem – then Consolidation may seem the better choice. However, imagine now that the relevant policy actors are available, but underrepresented in the incumbent coalition: neither Adaptation nor Consolidation would immediately lead to improvements in developmental outcomes, and therefore a donor would be better off by pursuing a Certification type of influence which grants legitimacy to the policy process.

In sum, assuming a dominant-faction political settlement, a consequentialist ethics of assistance would have even a pro-poor donor choose to side with continuity instead of change, with the specific kind of influence depending on its expectation that there is enough local implementation capacity to achieve policy results.

Uncertainty, values, and the deontology of aid

Consequentialist aid is all about calculation, asking whether a political settlement supports different kind of results and assigning each alternative scenario a probability, given known risks. But what if risks are not fully known? What if the set of scenarios is not entirely clear? What if there is too little time-consistency among local actors to develop an accurate belief about their expected behaviour? There are good grounds for doubting whether these calculations are feasible, let alone credible:

"In placing all conclusions at the beck and call of claims about the value of outcomes and about the vastly complex causal connections that determine outcomes, [utilitarian and other consequentialist approaches] gain a spurious precision. Such reasoning may seem to anchor moral requirements in empirical calculation, but when evidence, data and calculations (not to mention units of account) are all hazy, those requirements will be elastic, if not indeterminate." (O’Neill, 2004, p. 245)

Consequentialist approaches rely on the concept of economic risk: the idea that there are a number of alternative outcomes whose probability can be estimated a priori. This is what Frank Knight called “objective probability”, as opposed to uncertainty about the number of relevant outcomes and their likelihood, which he called “subjective probability”:

"The practical difference between the two categories, risk and uncertainty, is that in the former the distribution of the outcome in a group of instances is known (either through calculation a priori or from statistics of past experience), while in the case of uncertainty this is not true, the reason being in general that it is impossible to form a group of instances, because the situation dealt with is in a high degree unique." (Knight, 1921, p. 233) Whether a donor is facing a situation of risk or uncertainty is essential to the applied ethics of assistance: if the probability of expected outcomes is not calculable due to the unique nature of context, if the very set of expected outcomes cannot be designed due to the complexity of interactions, a consequentialist approach is simply impossible. So what takes the place of risk calculation? Building on Knight’s conception of uncertainty, Mark Blyth showed that it is ideas (ideologies) that often determine the path of institutional evolution out of crisis situations (Blyth, 2002). In other words, some sort of value-rationality is the only way out of uncertainty. And this means that, despite the illusion of calculation, often donors will be faced with choice environments in which only a non-consequentialist logic can provide any guidance.

In contrast to consequentialism, non-consequentialism – also known as deontology – “denies that the rightness or wrongness of our conduct is determined solely by the goodness or badness of the consequences of our acts or of the rules to which those acts conform”: consequences may impact the rightness or wrongness of an act, but the difference with consequentialism lies in the fact that two acts with the same consequences may be morally different, given a value standpoint (Kamm, 2006, p. 11). Non-consequentialist thinking is strongly inspired by Immanuel Kant’s idea that persons have an unconditional value which makes them worth of respect, and therefore ought to be treated as ends in themselves and not just means. A consequentialist calculation of a person’s happiness relative to some kind of overall good would not do enough to uphold this conception of individual worth: the end does not justify the means, and harm is never permissible as an intended component of the search for the greater good, only as an unintended by-product. In the ethics of assistance, John Rawls’s law of peoples and the capabilities approach of Amartya Sen and Martha Nussbaum would illustrate different kinds of deontological ethics (Nussbaum, 2001; Rawls, 2001; Sen, 2011).

Going back to the hypothetical case of a dominant-faction political settlement, a consequentialist approach would have the donor pursue policy results at the expense of overall settlement change: incumbents would likely be strengthened by international influence, maintaining or even lowering the chances that non-elite challengers have of changing the status quo. This kind of harm is permissible in teleological moral thinking because it is part of the process of producing a greater good, which in this case would be marginal increases in poverty reduction. A non-consequentialist approach would have none of that, however: should a donor committed to poverty reduction enter a poverty-blind or even poverty-inimical political settlement, deontology would ask it to consider very carefully what course of action would protect and enhance the inherent value of the poor and the actors that represent them. If it decided to work with incumbent actors to achieve short-term policy results, the donor could in fact harm the poor in an impermissible way by perpetuating or even worsening their disenfranchisement. If it chose to support challengers and their contestation of the political settlement, in contrast, it could harm them indirectly by not achieving short-term poverty-reduction results. The difference is that indirect harm would be permissible to the extent that it was an unintended by-product of trying to support their rights, dignity and enfranchisement. While deontology allows for some teleological calculations, it is safe to conclude that a non-consequentialist donor would disregard those types of influence which entail continuity through support of elites – Adaptation, Legitimation, and Consolidation. Within the spectrum of support for challengers in the political settlement, the choice between Contestation, Delegitimation and Disruption depends on the role and capacities of pro-poor challengers: if there are capable ones already within the settlement, a Delegitimation approach would be the most cost-effective way of promoting their relative power; if there are none, Contestation would seek to alter the ideational basis for political settlement by introducing new cognitive and normative ideas about the desirability of inclusion; lastly, if the settlement is so antithetical to pro-poor actors that a less direct approach is unrealistic, the only logical option that a non-consequentialist donor may have left is Disruption.

The contrasts between practical implications for teleological and deontological aid could not be any starker:

- Consequentialist donors will optimise pro-poor results by working with incumbent actors, while non-consequentialist donors will support pro-poor challengers.
- Consequentialist donors will determine their type of influence by evaluating the commitment of elite actors, while non-consequentialist donors will evaluate the political capabilities of pro-poor actors.

Of course, in the real world there is no such thing as a “consequentialist donor” or “non-consequentialist donor” acting in isolation. But this mental exercise illustrates the kinds of ethical calculations faced by aid practitioners on a day-to-day basis. The most important part of the argument is not which philosophy of ethics a particular practitioner follows, but the fact that it is always going to follow one, due to the stark political implications of intervention highlighted by a political settlements approach. The question for researchers and advocates working within this intellectual agenda is whether they will only contribute analytical knowledge, or whether they are also ready to take steps towards contributing an ethical map that can help practitioners navigate the uncertainty of political assistance.

4. Towards a practical ethics of assistance

Academic conversations about the ethics of assistance seem to focus on first principles and a very macro-level perspective of reality: should we give to the poor, why or why not, how should wealthy countries behave, what should wealthy individuals do. The fact is these debates are not terribly helpful to development practitioners on the ground, who are forced to guide their behaviour on the basis of personal intuition and folk ethical guidelines like “do no harm” (Birdsall, 2007). As the previous section discussed, “harm” is a complicated notion, and consequentialist and non-consequentialist approaches to morality have a very difficult understanding of what kind of harm is permissible (Kamm, 2006). Perhaps it is time to develop – to borrow Peter Singer’s term – a practical ethics of assistance: discussing the ethical implications not for countries or wealthy citizens, but for field offices and practitioners, and illuminating not the dilemmas of whether to assist, but how to do so. Such practical ethics would allow us to interrogate the moral impact of aid and donors on the transnationalised political settlements and policy domains of the countries in which they operate, but also the panoply of competing best practices that orbit the aid industry in an ever-growing whirlwind of confusion. Instead of arguing ad nauseam whether “best fit” or “best practice” lead to the best results, let us begin by asking whether they are in fact morally desirable.

The Paris principles and the aid effectiveness agenda

It may be worth asking whether the aid effectiveness agenda outlined in Paris, and elaborated in Accra and Busan, is forcing donors onto an ethical path which forsakes pro-poor actors. Animated by a desire to check the worst tendencies of developed countries in dealing with developing ones (Hyden, 2008; OECD, 2005), the state-level morality inherent in some of the Paris principles may very well run counter to a non-consequentialist pro-poor agenda. In particular, by asking donors to focus on ownership (the government’s, implicitly), alignment with local agendas (again, the government’s) and use of country systems, the effectiveness agenda logically favours incumbents over challengers (Yanguas, 2012, Chapter 7). This inherently conservative approach to aid risks neglecting the politics of pro-poor enfranchisement and advocacy which a different set of values would suggest.

The results agenda

Partly animated by the discourse of effectiveness, but also bolstered by political controversy at home, some aid donors have fully embraced a results-oriented agenda which espouses a hyper-teleological approach to development assistance. Fiduciary risk analysis, the logical framework, and the theory of change are key instruments of this agenda, all of them contributing to an illusion of control over the results chain that runs from aid inputs all the way to developmental outcomes (Eyben, 2013; Tilley and Tavakoli, 2012). Moreover, the desire for calculation risks biasing donors towards interventions with strictly quantifiable goals, very few of which can be said to relate to the underlying political settlements of the countries in which they operate.

Good enough governance

The previous section already touched on the inherent consequentialism of “good enough governance”, “best fit, not best practice” and “working with the grain”. Besides the misplaced trust in donors’ ability to accurately analyse all political risks in the operating environment, this discourse of low-level effectiveness implies a perverse kind of positive feedback, in which seemingly high-performing elites are rewarded, whereas difficult political settlements are increasingly avoided by analytically savvy aid. In the process, the allure of the “good autocrat” risks endearing donors and their ecosystem to those less-than-democratic political settlements which The role and responsibility of foreign aid in recipient political settlements

seem to behave as “developmental states” (Booth and Golooba-Mutebi, 2012; Kelsall and Booth, 2010).

Political-economy analysis

Should one adopt a teleological ethics of assistance, then data collection and analysis may become a requisite component of any intervention. And if the political settlement – or any other strategic action field along the same lines – does have an actual impact on the policy environment and operating risks, then some form of political-economy analysis is indispensable for donors (Duncan and Williams, 2012; Yanguas & Hulme, 2015). Effectiveness would not be the sole justification for analytical work any more: a consequentialist donor can only identify the best course of action by reducing uncertainty to risk, and this entails considerable research. As to the more non-consequentialist donors out there, analysis may be the only way to accurately establish what kind of political settlement they are operating in, and whether it allows pro-poor actors to flourish.

Political settlements applied research

Lastly, the practical ethics of assistance can be turned towards political settlements theory itself, in particular its role in applied research funded directly or indirectly by donor agencies. I hope to have shown in this paper that a political settlements approach forces donors to confront their own influence over resources, actors and dynamics. Simply put, there are no ethics-free practical implications: seemingly “logical” conclusions like “working with the grain” obscure an implicit consequentialist bias, which may not match the ethical background of some donors. Up until now, political settlements research has been ethically blind, and it is up to researchers to fully grapple with the implications of their findings. They may not be in a position to tell donors what is the morally right thing to do, but at the very least they can work on making these dilemmas explicit, so that practitioners themselves can make the choice. Applied political settlements research, too, could greatly benefit from a new practical ethics of assistance.

5. Conclusion

It is generally understood that ethical calculations underlie most of our conversations about foreign aid, even when these unfold at their most technocratic, abstract or arcane. But it is important to realise how our analytical tools for studying development and development cooperation also give rise to important ethical considerations. My goal in this paper has not been to expose political settlements as a morally suspect research agenda, nor to question the underlying morality of its policy implications. In fact, I believe that one of the chief contributions of political settlements thinking may well be the clarity that it injects into debates about power and inclusion. But this potential contribution calls for two additional tasks: first, a better definition of how power relations unfold in practice; and second, an equally political interpretation of the power relations inherent in the policy audiences for political settlements research. In this paper I have proposed a potential refinement of political settlements, based on a mix of field theory and contentious politics. This theoretical proposal is open to challenge, but it was indispensable for addressing the second task: based on the challenger/incumbent model, I have sought to generate clear ethical implications for aid donors, who comprise one of the likely audiences of political settlement research.

Emerging debates in the aid community seem at times overwhelmingly concerned with project success at the expense of long-term transformation, with the tactics of assistance over the strategies of reform (Yanguas and Bukenya, 2016). But this paper has also raised the unanswered ethical questions faced by seemingly technical propositions like results-based approaches or country ownership. A practical ethic of assistance – however inchoate or even misguided – is sorely needed in order to keep these debates grounded in the larger politics of development. Practitioners are acutely aware of such practical ethics, rooted as they are in the day-to-day responsibility of programming choices about resources and legitimacy in uncertain environments. Those of us in academia tend to be a bit more detached, protected as we are by distance, limited accountability, and a longer and blurred impact chain. But by retreating from our own values we lose an opportunity to engage with the very politics that we like to contemplate (Schmidt, 2008). It is up to us to begin the effort of constructing a more informed ethics of assistance, lest our colleagues in the field fall to the hidden allure of simplification, replication, denial and plain old ideology. Political settlements can be the intellectual agenda that sustains such an ethical theory, but in order to do so it has to stop seeing itself as a purely analytical tool. References

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The Effective States and Inclusive Development Research Centre (ESID) aims to improve the use of governance research evidence in decision-making. Our key focus is on the role of state effectiveness and elite commitment in achieving inclusive development and social justice.

ESID is a partnership of highly reputed research and policy institutes based in Africa, Asia, Europe and North America. The lead institution is the University of Manchester.

The other institutional partners are:

• BRAC Institute of Governance and Development, BRAC University, Dhaka • Center for Democratic Development, Accra • Center for International Development, Harvard University, Boston • Department of Political and Administrative Studies, University of Malawi, Zomba • Graduate School of Development, Policy & Practice, Cape Town University • Institute for Economic Growth, Delhi

In addition to its institutional partners, ESID has established a network of leading research collaborators and policy/uptake experts.